Expert: Shirley McAllister, CPP, PHR - 2/19/2009

Question
I use QB2006 WITHOUT the payroll module; I do my payroll manually. I need to know what the correct account types & tax lines are for the following payroll items:
Federal Withholding
State Withholding
Medicare (Company Portion)
Medicare (Employee Portion)
Social Security (Company Portion)
Social Security (Employee Portion)
Unemployment (Federal)
Unemployment (State)
All of the above are currently set as Type: EXPENSE & Tax Line: DEDUCTIONS: PAYROLL TAXES; however, I'm not certain if these are correct. I need to verify this because I want to ensure proper reports for taxes, especially the Balance Sheet. I'm wondering especially if any or all should be tax line classified as Balance Sheet liabilities.

I am an Illinois S-Corp

Answer
I do not use Quick Books, I have a different payroll system called Sage Software.

I would set mine up as liability accounts in the 200000 range on my system. I don't know if it would help you on your system.

Federal Withholding          2100000      Credit
State Withholding            2101501      Credit
Medicare(both portions)      2103000      Credit
Social Security (FICA)(Both) 2103000      Credit
Unemployment Federal (FUTA)  2104500      Credit
Unemployment State (SUTA)    2106001      Credit
Accrued Wages                2118500      Credit
Health Insurance (employee)  8050000      Debit

I think you can set your codes up according to what your company uses in it's chart of accounts. Usually liabilities are 200000 accounts.

You would have your salary as expense accounts:

Salaried Wages             8000001        Debit
Hourly   Wages             8000003        Debit
Overtime Wages             8000005        Debit
Bonus Wages                8190000        Debit
Employer FICA Expense      8010000        Debit
Employer Medicare Exp      8010000        Debit
Employer Unemployment TX   8020000 (Fed and state) Debit
Health Insurance (employer)8050000        Credit

Again, I do not use Quick Books so you may wish to find someone else on the forum that uses Quick Books or search for  a Quick Books help forum. I know that there is one on the internet.

Shirley